Kash Avena
June is officially ending, with its flurry of weddings and happily-ever-afters. A lot of couples are now looking for new homes to start their own families. Are you one of them? Read on to find out tips and tricks on how to land not only your dream home, but a winning mortgage as well.
So you’ve just had your dream wedding and have ridden off into the sunset with the love of your life. You’re still basking in that warm fuzzy glow of just-married feels, but the time has come to dust off the confetti and start looking for a home and equally as important, a home loan you can actually afford. Not sure where to start? Worry not, we at Loansolutions.ph got your back. We came up with the following top tips in finding your very first home within your budget.
Tip #1: Find Out How Much Mortgage You Can Afford
Most banks and financing institutions base their home loan approvals based on the borrower’s capacity to pay and debt-to-income ratio. This simply means that to qualify for a home loan, you need to be making more than enough to cover your mortgage and living expenses. Lenders also offer better interest rates based on how good this ratio is. So how do you know how much you can afford for a monthly home payment? Sit down with your spouse and compute how much gross income you make together. Next, compute for 40% of your combined income. Your monthly mortgage payment should not amount more than this. For example, if your gross income is P50,000, your monthly payment should not be more than P20,000.
Tip #2 Plan How Long You’ll Be Living in Your New Home
Are you looking for a starter home with a high probability of moving out after a few years? Or are you looking at what can possibly be your retirement home as well? These are important questions because of fixed versus variable interest rates. Fixed interest rates remain the same throughout the entire loan term and are not affected by the market. Meanwhile, variable rates are subject to repricing after a predetermined period. Make sure to try to lock in a fixed interest rate congruent to how long you’re planning to pay for your new home.
Tip #3 Save Up for a Down Payment
The math for this is pretty simple: the more you save and put up for a down payment, the lower your interest rates and monthly mortgage would be. A higher down payment also increases your chances of getting your home loan approved. Aim to pay 20% of your dream home’s price upfront.
Tip #4: Don’t Take the First Home Loan Offer You Get
Once you find that perfect home, chances are your real estate broker or agent will recommend preferred banks and lending companies. There is also a chance that your real estate agent makes money from referring you to these lenders. Make sure to do your due diligence and not snap up the first home loan offer that you get. You may be missing out on lower interest rates and fees elsewhere.
Tip #5. Check Your Home Loan Options through Online Loan Portals
Online loan portals enable you to check what home loan options you qualify for, all within the convenience of your PC or mobile phone. With getting a loan online quickly becoming the norm, you now have the power to shop around for a home loan without ever having to line up or get put on hold over the phone (we hate that feeling too!). Loansolutions.ph for example has a team of trained loan advisers ready to help you find a home loan you can qualify for at the best interest rates. Once you fill out their 3-Step Loan Application Form, you will get a dedicated loan adviser who will guide you through the whole home loan process, from application, to submitting documents, to finally getting that loan. Oh, and did we mention they do this absolutely for free?
Buying your first home can be a thrilling albeit unnerving experience – from finding your dream home to qualifying for and signing up for a mortgage. Consider it as your first challenge as a married couple. Hopefully, with the tips we’ve given above, you will pass muster and get started on your future.
